THE downturn in Asia-North Europe since the end of the third quarter, appears to have ended with the "return of a small peak season", which suggests a cyclical upswing, says London's Drewry Maritime Research.
Although cargo from Asia to Northern Europe declined nine per cent to 768,000 TEU between August and September westbound, there was six per cent growth between the second and third quarter, suggesting a peak season unlike last year's flat performance, said Drewry's.
"Traders clearly see consumer spending increasing over the holiday period. Year-to-date growth in the first nine months remained a low 1.5 per cent, nevertheless underlining Europe's slow climb out of recession," said the report.
"Most growth during the period involved demand from western European countries, rather than from eastern Europe," it said.
Carriers responded to falling demand by cancelling sailings rather than withdrawing whole services. Drewry expects this technique to be applied over the winter season, at least until the P3 mega alliance's new schedules appear in the second quarter.
Six sailings were cancelled during the month, compared to none in August when ships were full to overflowing, resulting in vessel capacity falling by 1.3 per cent.
"The decline would have been higher had average ship size not increased during the period from 10,400 TEU to 10,510 TEU through vessel upgrades," said Drewry's.
The nine per cent drop in cargo and 1.3 per cent fall in capacity between August and September combined to drop Asia-North Europe vessel utilisation from 100 to 92 per cent, though this prompted a plunge in westbound freight rates.
"It seems that anything less than a full ship situation, involving much rolling over of cargo, is enough to panic ocean carrier sales departments these days. If ocean carriers persist in believing that anything less than 100 per cent vessel utilisation is unacceptable, the current number of westbound sailing cancellations will have to be dramatically increased from 14 to between 20 and 25 per month over the northern European winter season, assuming a five per cent cargo decline. The number will be less just before and after the Chinese New Year on January 31, but greater outside of this period," said Drewry's.
Eastbound, exports from Northern Europe to Asia increased four per cent between August and September, up to 382,000 TEU, but this still resulted in third quarter year-on-year decline of three per cent.
Yet the year-to-date total was up five per cent to 3.5 million TEU year on year between January and September.
The consequence of the westbound ocean carrier service changes mentioned earlier is that the capacity of all vessels sailing from Northern Europe to Asia also fell 1.3 per cent between August and September, down to 607,000 TEU.
But because cargo growth was greater, average vessel utilisation recovered from a weak 60 per cent to a slightly better 63 per cent. Although this appears to be enough to temporarily stabilise spot freight rate levels, it didn't last long.
